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Simplifying Higher Ed Retirement Choices | Expert Advice for Peaceful Transitions

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Welcome to a practical guide for higher education employees facing the complexities of retirement planning. Greg Shepard, a seasoned financial expert specializing in assisting individuals in higher education, recently addressed the common concerns surrounding retirement plans. In this blog post, we'll delve deeper into his insights and recommendations, providing you with a roadmap to simplify your retirement plan choices upon separation of service.

Understanding the Overwhelming Transition

Many higher education employees find themselves in a state of anxiety and confusion as they approach retirement. The transition from a steady job to managing a lump sum of retirement savings can be overwhelming. Greg Shepard recognizes this anxiety and offers a few grounding insights:

1.     Take a Breath: It's essential to take a step back, breathe, and recognize that you have options.

2.     Three Main Options: Greg outlines three primary retirement plan choices:

·        Do it on your own.

·        Use services provided by TIAA or Fidelity (largest higher ed retirement plan vendors).

·        Hire an independent investment advisor specializing in higher education retirement plans.

Exploring Your Retirement Plan Options

1. Doing it Yourself: While it's possible to manage your retirement plan independently, Greg highlights that it might be late in the game for many individuals who are new to financial planning. It's crucial to understand the intricacies of investments, income generation, and managing expenses.

2. Using TIAA or Fidelity: Greg acknowledges that these are significant players in the higher education retirement space. However, they often encourage their in-house investments, like lifetime income annuities for TIAA Traditional participants. While this isn't necessarily bad, it's essential to be aware that these companies might not explore opportunities outside their offerings.

3. Hiring an Independent Investment Advisor: Greg's specialization is in this area, and he emphasizes the benefits of seeking a financial advisor with expertise in higher education retirement plans. Independent advisors can offer customized solutions, combining various investment options for maximum benefit. While there's a cost associated with their services, the potential for a more tailored and advantageous retirement plan can be worth it.

Understanding Costs and Trust

Every choice comes with costs, and Greg emphasizes the need to understand these costs thoroughly:

·        Expense Ratios: These are associated with every investment, and it's crucial to comprehend how they impact your overall returns.

·        Advisor Fees: If you opt for an independent advisor, there will be fees involved. It's essential to have full transparency regarding these charges.

·        Trust Factor: Trust plays a significant role in your decision-making process. Many employees have long-standing relationships with their retirement plan providers. This trust can influence your choice significantly.

The Role of Performance

Greg reassures that, in today's financial industry, investments have become quite standardized. Most advisors can offer similar investment options. Therefore, performance alone is not a significant differentiator.

What truly matters are the plan's logistics, costs, and the trust you have in your advisor or plan provider.

Conclusion: Make Retirement Simple

Retirement planning should be a stress-less endeavor. Many higher education employees, even those capable of handling their finances, opt to enlist professional help to reduce stress during this critical life transition.

In summary, Greg Shepard's insights encourage employees in higher education to approach retirement planning with a clear head. Understand your options, assess costs, and, most importantly, choose a plan that aligns with your financial goals, your trust in the provider, and your comfort level. Retirement should be a time of relaxation and enjoyment, not a source of anxiety. If you're unsure, seek advice from professionals who specialize in higher education retirement plans to ensure you're on the right path toward a comfortable retirement.

Contact Information: If you have questions or need assistance with your retirement plan choices, you can reach out to Greg Shepard at greg@shepardfiancial.com

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*Nothing discussed in this blog post should be construed as investment advice.  Each situation is unique and you need to receive professional advice from independent fee-only financial advisor that's familiar with higher ed retirement plans prior to implementing any strategies discussed or thought of on your own.  

**S&A Financial Services, Inc. is a registered investment advisor. Content presented is for informational purposes only and should not be considered as investment advice or as an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Always consult with your tax advisor or attorney regarding your specific situation.

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